Automakers push Congress for higher fuel standards

Posted by Talbot Payne on April 19, 2018

Two weeks after winning a victory against aggressive federal fuel economy rules aimed at speeding adoption of electrified vehicles, the U.S. auto industry went to Capitol Hill last week to press Congress for a national fuel octane standard that would help increase the efficiency of the internal combustion engine.

With consumers resistant to expensive, battery-powered cars and gas prices low, automakers say they will have to meet federal mpg standards in coming decades with advances in the gas engine.

Key to that progress, they say, is higher octane fuel — about 91-octane compared to today’s 87-octane pump standard — which will deliver 3-percent-better fuel economy for an estimated 3-percent increase in cost. The standard is referred to by its international metric, 95 RON, which translates to U.S. 91-octane.

“We got a very good reception in Washington,” General Motors Co.’s vice president for global propulsion, Dan Nicholson, told The Detroit News on 910 AM Radio Saturday, one day after a hearing before the House Energy and Commerce Committee that included representatives of Detroit’s Big Three and members of the fuel industry.

Higher octane makes gas more stable under ignition compression — commonly known as knock — which can damage internal engine components. A higher, 91-octane (95 RON) standard would allow engineers to design engines to a higher compression ratio — perhaps to 15:1 over today’s average of 10:1 — and gain more mpg while not sacrificing performance.

European nations like Germany have already mandated 95 RON gas. Coupled with high gas taxes and engine displacement fees, their goal is to make gas engines more efficient.

“America deserves at least as good a fuel as Europe has,” Nicholson told the SAE panel last week. “It will have customer value if it’s done correctly. We’ve studied it and we know that it’s cost-effective.”

The federal government, too, set ambitious goals of 54.5 average fuel economy by 2025, in part to encourage automakers to shift toward battery power. But consumers mostly have not followed, and — encouraged by automakers — the Trump administration has agreed to review federal mpg demands, even as Washington will continue dictating efficiency goals.

In Washington, Nicholson represented the USCAR coalition of automakers that includes Ford Motor Co.’s David Filipe, vice president for powertrain engineering, and Bob Lee, Fiat Chrysler Automobiles NV’s chief for global powertrain coordination. Also there were representatives from the fuel industry — ethanol fuel interests, refiners, and fuel retailers — which has long resisted higher octane standards because of their added costs.

The panel was a rare show of auto-oil industry brotherhood. Higher octane fuel typically fetches higher prices at the pump. Standard 87-octane fuel currently averages $2.71, with premium fuels another 50 cents above that at $3.23 a gallon.

Nicholson said that the high cost of premium fuel today, however, is misleading since it is “sold as a niche product.” If 91-octane were adopted as the national standard, the price increase would not be significant while delivering consumers better mpg in return.

“(The 95 RON standard) is the most effective way we can improve fuel economy — which is why we are fighting for it,” Nicholson told The News.

But David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research, says it might not be that simple.

“One of the things that is really uncertain is the economics of this whole effort,” Cole said. “You could achieve a better fuel economy, but whether it’s going to be enough with the cost increase of the fuel is a question. The economics as projected through the consumer is a really big deal.”

U.S. Rep. John Shimkus, R-Illinois, on the House panel Friday, called the effort to change to 95 RON a “major undertaking.”

“For one thing, we must deal with the proverbial chicken and egg conundrum — we can’t expect refiners and gas stations to invest in a new fuel unless they know that cars will be manufactured that will run on it, and automakers don’t want to commit to the new engines until they know that the fuel will be widely available,” he said. “Significant investment dollars and a great many jobs may be at stake.”

Nicholson said efforts to increase fuel efficiency by re-engineering gas engines — such as Nissan Motor Co.’s introduction this year of a variable-compression engines in its Altima sedan — are much more expensive solutions than simply raising compression levels in synch with higher-octane fuels.

“If we’re going to move forward with keeping internal combustion engines viable then we have to have improved fuels,” said Nicholson, until such time as the consumer market embraces electrification. Battery-powered cars have been dogged by high costs, a spotty charging infrastructure and fears of more limited range.

“The internal combustion engine is not dead yet, and it’s very important as we march towards zero emissions that we make significant improvement in the efficiency of internal combustion engines,” Nicholson said. “We’re now in peaceful coexistence with electrification. We’re working on both. There’s no reason not to work on both.”

Former GM Vice Chairman Bob Lutz, who is not part of the auto-oil consortium, said the timing is right for a 91-octane standard given the low cost of fuel and continued demand for gas engines.

“Right now electric cars make no common sense,” he said. “They need federal subsidies to be sold. Everything about them is artificially stimulated under the assumption we are running out of oil. But we’re not going to run out of oil.”

Nicholson said that the House Energy committee, chaired by Rep. Greg Walden, R-Oregon, was encouraging of the idea but that key details would still need to worked out. He said California, which currently only allows 91-grade premium fuel, would need to sign on to the national standard. And the standard would have to be phased in over time.